Tesla also reported its financial earnings of a wider quarterly loss, but higher-than-expected revenue

How is Tesla Motors dealing with its latest (and wider) financial loss in the third quarter? By ramping up Model S production to 400 units per week.

Tesla CEO Elon Musk announced that the company would increase production of its Model S EV to 400 units per week, or just over 20,000 per year. This is great news for Tesla, considering it recently faced production issues with the vehicle.

Around 13,000 customers have paid a $5,000 minimum fee for a Model S reservation, but only 250 have shipped. This is largely due to issues with increased production. However, Musk announced last month that Model S production had ramped up.

"Our production rate in the last week of September was roughly 100 vehicles, four times greater than our production in the first week of September as we overcame supply constraints," said Musk in October. "I am pleased to report that we completed production of 359 vehicles last quarter (delivering over 250 of those to customers) and have already made our 500th vehicle body.

"While we are indeed a few weeks later than we would like, this is not perhaps a terrible outcome for a product as advanced as the Model S, particularly given that Tesla is doing manufacturing of full vehicles for the first time with a new team and suppliers."

In December, Tesla will take production to a whole new level.

"Tesla is really past the point of high risk," said Musk on a recent conference call with analysts. "Several months ago, I said that the coming several months would really be the test for Tesla and the classic phrase of going through the valley of death. I feel as though we are through that valley at this point."

The Model S has been a bright star for Tesla, but unfortunately, that didn't stop it from reporting a wider loss for its Q3 2012 earnings. Tesla said its quarterly loss grew by 70 percent to $110.8 million USD. However, revenue increased 88 percent in the past year to $50 million. This was a nice surprise for analysts, who predicted $48.3 million.

Tesla expects to finish the 2012 fiscal year with $400-$440 million USD in revenue for the entire year.

The Model S received a nice boost last week when Automobile Magazine named the Model S its Automobile of the Year. Auto Mag compared the Model S to Apple because of its luxurious and innovative design, and even said Musk was similar to former Apple CEO Steve Jobs.

The Model S' superior range and luxurious features come at a high price. The 40 kWh base model starts at $57,400 while the 85 kWh version starts at $105,400. However, the Model S is eligible for the $7,500 federal tax credit in the U.S.

If you had an ounce of business skill or access to basic math, you'd know that all new companies are expected to make significant losses because they need to expend cash on R&D, prototyping, capital expenditures (manufacturing, buildings, equipment), salaries, tax. Those losses should be offset in future years by actually selling product to raise revenue.

The fact that Tesla is loss making now is normal. Unless you know of some magical fairy-dust powered process where new companies can make massive profits with zero startup capital and expenses.